Friday, March 02, 2012

LUS Fiber changes pricing policies (updated)

Without any fanfare LUS Fiber has instituted two, make that three, major changes in its pricing policies—there's no longer a minimum monthly amount to get on the network, they've changed the speed tiers on their internet offerings, and they've dropped the policy of not offering special bundle pricing.

Dropping the monthly minimum to secure a subscription has been in place for some time—I noticed it during my recent post comparing the pricing of LUS and Cox. Previously LUS Fiber had a minimum $44 dollar charge. At the time it was justified as necessary considering that the utility was making an expensive investment in fancy electronics and installation costs when they lit up a new customer and that cost was exacerbated by LUS not requiring a yearly contract or installation fee. But the minimum also had the effect of making it difficult to argue that LUS Fiber was doing all it might to close the digital divide; eliminating that "gotcha" will help make the case that LUS Fiber is simply a cheaper, faster service. When queried Huval confirmed the policy change.

A Facebook status message today announced:
Very exciting news from LUS Fiber today! Save over $300 when you sign up for video, Internet and phone from LUS Fiber. Three different bundles, three LOW prices.
That means the end of the no-bundling-discounts policy that LUS Fiber has followed since it inception. The previous "VIP" bundles had been nothing more than packaging three levels of the basic services together in a convenient package—the user did not get the limited-time "discount" that conventional providers used to steer users higher tiers. These three new bundles do give a discount — a standard $323.64 over the first six months. But along with that discount comes LUS Fiber's first real contract—a user is obligated to continue all those tiers for another six months at a step increase in price or face a 300 dollar termination fee that would wipe out the original savings.

Appearing alongside the new bundles are new internet tiers and new internet pricing. Considering the fact that LUS Fiber raised its prices about 6 weeks ago, making a sweeping set of changes to its internet offering so quickly seems odd. (Other services appear unchanged.)  Previously internet could be purchased at symmetrical speeds of 10, 30, and 50 mbps with an business-priced 100 meg version available to residents that were willing to pay the premium. The new speeds are 10, 15, 40, 75, and 100 mbps. The pricing for the old and the new speeds:


The logic behind the changes in both speed and pricing escapes me...perhaps LUS will be forthcoming as to what it hopes to accomplish. Given that this change comes so close on the heels of a price hike I'll expect some larger explanation. It is also unclear what happens to current internet customers and how long it will be before old customers have to shift to the new tiers and pricing plans.


Update 3/8/12: 
This morning the Advertiser runs a story on these pricing changes that adds some of LUS' reasoning for the changes...
On the new discounted bundling policy:
"We want to make it easy for people to switch and try out their own community-owned fiber-optic system," said Amy Broussard, a spokeswoman for LUS Fiber.
On the change in speed tiers:
Broussard said LUS Fiber decided to increase the speeds it offers after realizing customers needed more bandwidth as households add additional devices, like mobile phones, tablets and gaming consoles to home Internet networks.
A major difference between my blog post above and the Advertiser story is the inclusion of the old 10 Mbps tier—at the old price—in the new set of tiers being offered ongoing. I'm pretty confident that wasn't on the new LUS internet pricing page initially but I am very happy to see that the lowest tier is being retained at the old price. It means that LUS Fiber will offer a very competitive "low tier" to our citizens wishing a low price product—10 times the download speed for 3 dollars a month more than Cox's lowest tier and a much better price per Mbp—as the Advertiser notes:
Overall, the cost per Mbps is far more expensive for Cox customers. A Cox Internet subscriber with the lowest tier of service will pay $25.99 per Mbps of service, while the lowest tier of LUS Fiber's Internet service offers customers a rate of about $3 per Mbps.
The changes made in red to the original post above reflect the retention of the the 10 meg tier. 


Raymond Camden said...

So is it safe to assume if you were on the 30 you are now on the 40? That wouldn't be so bad. But the 50 to 75 jump is HUGE.

John said...

Raymond, I haven't run any speed test yet... but I would think that they could conceivably run both sets of tiers concurrently. That would amount to having six limits at the edge of our network instead of three. Have you tested your connection?

Bryan F. said...

This is very strange. I'm on the 50 Meg service. I wouldn't mind dropping down to the 40 Meg service because I don't really use 50 Megs...ever. I definitely won't up the 75...that's just too big of a leap.

Yet another example of LUS making poor decisions...they're going to lose $8/month from me.

John said...

Raymond, Bryan, all, Justaquicknote:

I talked to Huval after the press conference yesterday and queried him about these policies.

First: folks who are already on the system retain their current speed tiers and pricing. You will not have to "move;" at least not anytime soon.

Second: You _can_ go with one of these bundles if you want to take advantage of the 300 buck plus in the year savings and don't mind the changes in your lineup or signing a year's contract. (That's a unique policy as far as I know. These things uniformly except current subscribers in all the other cases I know of.)

I'm working up a more thoughtful post, hopefully with some price comparisons but wanted to clarify that much now.